International Journal of Entrepreneurship (Print ISSN: 1099-9264; Online ISSN: 1939-4675)

Abstract

Budgetary Governance and Sustainable Development in Nigeria

Author(s): Otalor J.I, Oti P.A

The study examines the relationship between actual expenditure outlays for education, health, infrastructure, social amenities and agriculture and public debt and deficit as indicator of sustainability and the implication for national development in less developed economies like Nigeria. The empirical strategy adopted for estimating the variables specified in the model for this study is the Autoregressive Distributed Lag (ARDL) approach to cointegration. Relying on the progressive theory of public expenditure, the study posits that sustainability may remain at a very low ebb in Nigeria if the vast resources at the disposal of government are not deployed in an enduring manner. The cointegrated test result indicates that in the long run, burgeoning public debt and deficit portend danger for the Nigerian economy as expenditure patterns leads to slow adjustment in fiscal stability. But true to our apriori expectation, the short run 1 result of the study reveals that the coefficient of expenditure on education and infrastructure are positive and significant, indicating that this form of expenditure exerts significant instability in the public debt behaviour over time. However, expenditure on health and agriculture have negative effect on public debt and deficits, suggesting that budget outlay in these sector are not financed through debt and deficits. Apparently, in Nigeria, since 1981, expenditure on education and infrastructure is financed predominantly through public borrowings and budget deficits, implying that budgets for education and infrastructure in Nigeria appears to be at the expense of the unborn generations as supported by the yearly increase in accumulation of public debt. The study recommends that government in Nigeria should watch the rate of accumulation of public debt as it portends danger for the nation especially as the rate of change in expenditure on education and health which has direct impact on the teeming population of youth in the country largely falls short of change in public debt and deficit.

Get the App